Tag Archives: George Smitherman

Surplus power in Ontario: $4 billion lost

13 Monday Apr 2015

Posted by in Renewable energy, Wind power

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From Wind Concerns Ontario:

Wind output up, exports up, cost of electricity up— no coincidence

Five years ago, in 2009, George Smitherman, Minister of Energy during the McGuinty reign, rammed through the Ontario Legislature the Green Energy and Green Economy Act.  The Act ushered in the FIT (Feed In Tariff) and MicroFIT programs, attracting corporations from around the world who wanted the lucrative power contracts being let by the government-mandated Ontario Power Authority.

The result of the Act is now evident with huge chunks of rural Ontario covered with solar panels and spiked by 500-foot industrial wind turbines cranking out intermittent electricity, surplus to our demand, 99.9% of the time.

Early in 2010, the Independent Electricity System Operator (IESO) advised us of electricity generation    for Ontario by fuel type for 2009.  The headline in their press release stated: “Wind Power in Ontario Generates a New Record in 2009.” Wind produced 2.3 terawatt hours (TWh) or 1.6% of Ontario’s total demand of 139 TWh.   The same press release noted Ontario exported 15.1 TWh, and wind’s percentage of those exports was 15.2%.  The release also disclosed the average HOEP (hourly Ontario electricity price) for 2009 was $31.6 million per TWh, and the Global Adjustment (GA) $30.6 million/TWh.

That means, the costs of power generation (on average) were $60.2 million per/TWh.

Wind significant share of the loss

In 2009, Ontario exported 15.1 TWh generating revenue of $477.2 million (15.1 TWh x $31.6 million), but the TWh exported cost Ontario ratepayers $909 million (15.1 TWh X $60.2) — that means Ontario lost $432 million.  The cost of power production from wind was $283 million (2.3 TWh X $123 million/TWh), representing 65.5% of the losses on the exported TWh.

Fast forward five years to January 2015: IESO’s announcement indicated Ontario’s demand in 2014 was 139.8 TWh. Wind was 6.8 TWh, or 4% of all generation.  Exports grew to 19.1 TWh and wind’s percentage of exports shot up to 35.6%.   HOEP was $36 million/TWh and the GA jumped to $54.6 million/TWh, making the all-in-cost to Ontario’s ratepayers $90.6 million/TWh.   The cost to produce 19.1 TWh was $1,730 million (19.1 TWh X $90.6 million), and revenue generated from the sale was $688 million (19.1 TWh X $36 million). That left Ontario’s electricity ratepayers to pick up the $1.042 billion shortfall.  The cost for 6.8 TWh of wind was $836 million plus another $42 million1. for curtailed wind bringing its cost to $878 million, representing 84 % of export losses.

$4 billion

The all-in-cost of Ontario’s electricity generation jumped from 6.2 cents/kWh in 2009 to 9.06 cents/kWh in 2014, an increase of 46%. Ratepayers picked up an additional burden of $4,048 million for 139.8 TWh.

The extra .8 TWh (800 million kWh) Ontario ratepayers consumed in 2014 versus 2009 cost us over $4 billion or $5.06 per/kWh, much of it was caused by the push for renewable energy and the need to have back-up power plants for when the wind is not blowing or the sun isn’t shining.

Imagine how many subway stations or hospitals $4 billion might have built.

©Parker Gallant

April 13, 2015

Big Wind’s “Big Bonanza” in Ontario: subsidies benefit a few corporations, not ratepayers

04 Wednesday Feb 2015

Posted by in Renewable energy, Wind power

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From the Financial Post Comment, February 4, by Brady Yauch, executive director the Consumer Policy Institute

When the Ontario government launched its Green Energy Act (GEA ) in 2009, it promised “new green economy jobs” and ” a wide range of economic opportunities.” Then Minister of Energy George Smitherman argued that the GEA would be a boon to Ontarians of all stripes: “We see opportunities in our rural communities for farmers, not just to lease their land for big companies that are the proponents of wind farms, but indeed for clusters of farmers to see themselves as investors in projects…. the emergence of thousands of smaller green energy projects—microgeneration—in urban as well as rural areas.”

Yes, everyone would need to pay a little more for renewable power, the public was told, but the benefits would be widely shared, for the ultimate benefit of all. As it turned out, power rates didn’t go up a little – they soared. And the subsidies weren’t widely shared among the folk – a handful of billion dollar companies pocketed most of them, most of them outside the province.

According to an analysis by the Consumer Policy Institute and Energy Probe, 90% of the wind subsidies went to just 11 companies, 80% of the subsidies went to nine companies with annual revenues over $1-billion, 60% of the subsidies went to six companies with more than $10-billion in annual revenue.

As for the province’s claim that it wants to create an Ontario-based “green economy,” less than 10% of subsidies to wind generators went to small-scale or local owners.

Since 2006, when the province first started subsidizing wind turbines, the province has provided more than $1.92 billion in subsidies. This act of corporate welfare is far from over.

According to the Ontario Power Authority (OPA) – the provincial agency in charge of energy planning and contracting – the province has signed deals for another 2,630 MW of wind energy to come on stream in the coming years, on top of the 3,065 MW already in commercial operation. All of that generation will receive above market rates courtesy of ratepayers for their output. In total, the amount of subsidies to wind producers could hit $8-billion over the next decade and $13-billion over the next 20 years.

The list of companies receiving the lion’s share of subsidies reads like a “who’s who” in Canada’s energy sector and corporate heavyweights. Brookfield Renewable Energy (a subsidiary of Brookfield Asset Management), Enbridge and Transalta alone accounted for about 38 percent of all subsidies handed out to wind generators. Those companies combined brought in $54-billion in total revenue in 2013.

Samsung, which posted $217-billion in revenue last year, is expected to triple its wind capacity in Ontario – and the subsidies that go along with it – in the next couple of years.

The damage to ratepayers for such policies has been significant. Since 2009 – when the GEA was introduced – ratepayers in Ontario have seen the commodity cost on their energy bills climb dramatically, with the regulated price of power over that time having increased on average by 56%, or just over 9% annually – more than five times the rate of inflation, making electricity price increases worse in Ontario than elsewhere in Canada.

To make matters worse, the high rates being pushed onto ratepayers has lowered demand for electricity across the province in recent years. That means Ontario now has a significant surplus of power, which it then exports to neighbouring jurisdictions at a loss. Ontario ratepayers are now subsidizing the energy consumption of households in America and other provinces.

Nearly everyone is losing when it comes to renewable energy in Ontario – except for those few companies that planted industrial wind turbines across the province and are receiving billions in subsidies for their effort.

Brady Yauch is an economist and the executive director of Consumer Policy Institute. bradyyauch@consumerpolicyinstitute.org

NOTE from Ottawa Wind Concerns: The Library of Parliament, on request from MP Pierre Poilievre, estimated that IF the wind power project proposed for the North Gower-Richmond area of Ottawa by Germany-based Prowind had gone ahead (it almost reached approval), the 20-MW project would have cost Ontario ratepayers $4.8 million per year.